A new mediation program was created by Broward County Florida. The goal is to ensure that both homeowners and their lenders have a forum to communicate face to face, and a mediator will help in the process to try to find a solution that works for both parties.
The new foreclosure mediation program is the result of a study that was conducted by the Florida Supreme Court. The study was undertaken to try to find ways to lower the number of foreclosure cases in the state, and to try to find solutions to the foreclosure crisis plaguing Florida.
The Chief Judge of Broward County created the program. The goal is that the mortgage lender, meeting together with the homeowner at a neutral location, can sit down with a neutral third party, that being the mediator, to discuss all options and to ideally work out the loan modification or some type of solution, along with a payment schedule that ensures long term success.
The details include the following. The mediation program will work like this. Once a foreclosure case is filed by the lender, the case will be referred to a housing counselor or a case manager from the company handling the mediation program. That non-profit company is part of the American Arbitration Association. During the process the homeowner will also be notified and, if the borrower does agree to a free mediation session, the homeowner will need to undergo a credit counseling sessions. As that is ongoing, the bank and the homeowner will begin the process of trying to work out a resolution, which could mean reducing the interest rate, a loan modification, or reducing principal, or even letting go of the home if there is no hope of finding a way to save the homeowner. There is no guarantee each case will come to a resolution.
The medication process will also in effect allow the family to stay in the home longer, as the process from start to finish is expected to take 4 months. The cost of the foreclosure mediation sessions -- which could cost up to $750 -- will be paid directly by the bank that files the foreclosure action and their is no cost to the borrower.
While results of course will vary, the data shows it can be very helpful. The Senior Vice President of American Arbitration Association has said that they have seen success rates of 50-60% when lenders and homeowners get together into the same room and communicate to try to work out a solution to a foreclosure. And a formal mediation program and structure should only help to increase that rate.
Local Broward County Housing counselors and foreclosure defense attorney believe that the mediation program will help homeowners that are facing foreclosure, however much of that depends on the banks and lenders.
Many believe that as a result of mediation, lenders are more likely to do things like reduce the interest rate, change the principal, and address large past due balances that may be on homeowners mortgages. So if you are facing a foreclosure, you should get contacted by the American Arbitration Association. Or feel free to call them at 1800-218-5524, or ask you lender about the mediation program.
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